Hong Kong (CNN Business) — The US-led offensive against Chinese tech firm Huawei is creating big problems for mobile operators as they start building the next generation of wireless networks.

The United States is trying to persuade other countries not to allow Huawei equipment into new superfast 5G networks because it claims the gear could be used by the Chinese government for spying.

Huawei strongly denies the accusations. And it has already built up such a strong lead in 5G technology that it's practically irreplaceable for many wireless carriers that want to be among the first to offer the new services.

"Banning Huawei will create a vacuum that no one can fill in a timely fashion and may seriously impair 5G deployments worldwide," said Stéphane Téral, a mobile telecom infrastructure expert at research firm IHS Markit. The uncertainty is particularly problematic for Europe, where Huawei was expected to play a key role in building 5G networks that the region's leaders say are vital for its economic future.

The international rollout of 5G has become a front line in the broader clash over advanced technology between the United States and China that is reshaping the relationship between the world's top two economies.

The United States doesn't have a heavyweight global competitor to Huawei in telecommunications equipment. The Chinese firm's biggest rivals are Ericsson (ERIC) of Sweden and Nokia (NOK) of Finland. But they have struggled for years with losses and job cuts while Huawei has powered ahead, generating annual revenue of more than $100 billion, building a strong base in China and amassing intellectual property that will help determine the future of 5G.

Unhappy mobile operators

Some top international mobile operators are warning that by shutting Huawei out of 5G networks, countries risk undermining their own tech capabilities. The new wave of wireless communications is expected to increase internet speeds as much as 100 times compared with 4G networks, and help power emerging technologies like smart cities and connected vehicles.

Vodafone's (VOD) CEO Nick Read cautioned last month that a complete ban on all Huawei gear would substantially delay the availability of 5G. The mobile carrier has suspended the installation of the Chinese company's equipment in core networks in Europe while it speaks with authorities and the company.

"There is only one true 5G supplier right now, and that is Huawei," he said at an industry event in London. "The others need to catch up."

BT (BT) said in December that it won't include Huawei equipment in the heart of its planned 5G network, but will continue to use it for areas that are considered "benign," like the radio masts that connect wireless devices with the core network.

The head of BT's consumer brands told CNN Business last week that Huawei had given him no "cause for concern" over the years.

But British officials have security concerns, and Huawei has promised to spend $2 billion to address them. In a letter last month to UK lawmakers, the Chinese company warned that the process will take three to five years to have tangible results, likening it to "replacing components on a high-speed train in motion."

Huawei's rivals may be a year behind

The situation should have Ericsson and Nokia cheering, but experts say the two companies may not be very well positioned to capitalize on Huawei's difficulties.

"It goes without saying that other leading vendors stand to benefit in the short-term," according to analysts at Dell'Oro Group, a market research firm that specializes in telecoms infrastructure analysis.

Ericsson and Nokia both declined to comment on their competitors. Instead, they touted their advancements on 5G in statements to CNN Business.

Nokia claims it holds "the industry's only end-to-end 5G portfolio that is available globally," while Ericsson said it has publicly announced more 5G contracts with operators "than any other vendor."

But Huawei claims its 5G technology is at least a year ahead of its rivals — and many experts agree.

"From my conversations with carriers, they've found that Huawei is far more advanced than the other two right now," said Dexter Thillien, a senior tech analyst at research firm Fitch Solutions.

The battle for Europe

Executives at Nokia and Ericsson may also be treading carefully in public for fear of angering the Chinese government and being cut off from its vast market. Nokia, in particular, employs about 15,000 people in China, more than double its headcount of 6,000 in its home country of Finland.

"Their presence there is very, very important for them," Thillien said. "So I don't think they'll go publicly and go and say things like, 'Pick us, because we're European and we're more secure.'"

Even if governments don't block Huawei outright, the possibility of restrictions is casting a shadow over the Chinese company as mobile operators make investment decisions.

"It's probably better technologically — but technology's only one side of the argument," Thillien said. He pointed to Europe as "the big battle right now" for Huawei.

German Chancellor Angela Merkel said last week that "there are big discussions about Huawei" in her country. "We need to talk to China to ensure that companies do not simply give up all data that is used to the Chinese state," she said, adding that "safeguards" were needed.

"This situation has created a big bump in Europe's 5G roadmap, while other regions like the Middle East, Africa and Latin America are watching closely," Téral said.

"In the meantime, China and the US are chugging along" with their own rollouts, he added.

The race for 5G

Researchers have good reason to believe in Huawei's technical prowess.

It's one of the world's biggest holders of 5G patents and has contributed most to the effort to establish an international standard for 5G, according to IPlytics, a market intelligence firm that tracks tech trends.

Experts at the Eurasia Group say the standard-setting process "will determine not just how 5G networks are built, but also how money flows between participants." Companies that contribute heavily to developing the standard will receive royalty payments from other telecom players, which "in turn, will help fund future innovation," the analysts wrote in a November report.

Some experts, however, caution that it's too soon to say who's really leading on 5G, mainly because definitions of the technology have yet to be finalized.

"5G is still at the trial stage," said Zhenshan Zhong, who specializes in emerging technology in China for research firm IDC. "Before the test results come out, I don't think anyone can say for definite whether one vendor is actually going to be stronger than the other."

Huawei's financial muscle

Huawei's size and financial firepower enable it to dwarf its rivals' spending on efforts to come up with new tech.

In 2017, it invested more than $13 billion in research and development, topping Microsoft (MSFT) and Apple (AAPL), according to consulting firm PwC. In comparison, Nokia says it spent $5.6 billion on research and development that year, while Ericsson typically allocates around $4.4 billion each year.

Ericsson and Nokia's "financial troubles and strategy troubles over the last few years" may have weakened their focus on 5G, Thillien said.

Huawei has the added advantage of being the key player in its vast home market.

Worldwide spending on 5G will balloon from $660 million in 2018 to $70.9 billion in 2022, according to IDC. China alone is expected to account for nearly half of all global 5G expenditure this year, it said.

Huawei's ability to offer more than just network equipment gives it another advantage. It's one of the world's top three smartphone makers, and it also provides cloud computing services and makes artificial intelligence chips.

"Given how all-encompassing 5G is going to be, this 'total-telecom' approach is powerful," said Peter Richardson, a director of tech strategies at research firm Counterpoint. "No other industry player is doing anything similar."

Huawei should just carry on wiring up the 5G networks in our region and Africa. The western operators will come begging on their knees in five years' time, when we start up our 6G fun time.
Asia is big enough for Huawei to stay busy through the American trade politic meddling.

Boston101 Post time: 2019-2-16 23:03
Huawei has a long history of IP theft, fraud and spying. It's going to take a lot for the west to ev ...

A typical American smearing sour bum juice reaction. Just endless loads of lies and false accusations without a shred of proof. Their villainous western mindset goes like this:
"If we keep up the smearing and lies for months, years and to the decades, the lies will be taken as the truth".

Their Iraqi "Weapon of Mass Destruction" lies in the UN was one just plot that let these western criminals destroyed a whole country, and caused the death of miĺions of Iraqi people whose suffering are still ongoing to this day.